Low-income Families (Hansard, 18 October 1993)

§ 9. Mr. Evennett
To ask the Secretary of State for Social Security what extra help, over and above normal upratings, has been made available to help low-income families since 1987.

§ Mr. Burt
Since 1988, extra help has been made available to low-income families with children, worth around £1 billion a year from April 1993.

§ Mr. Evennett
I thank my hon. Friend for his reply and congratulate him and his Department on the extra resources for low-income families. They show the Government's commitment to the family. However, will my hon. Friend look carefully in the ongoing benefits review to ensure that the Government have targeted the most vulnerable and those with young children in real need? Does he agree that we must ensure that taxpayers' money is spent effectively and efficiently?

§ Mr. Burt
I am grateful to my hon. Friend's remarks and hope that I can reassure him that both the social security system and the Government's commitment are designed to target resources in the manner that he would like. In addition to the £1 billion for low-income families, which I mentioned a moment ago, we have also been able to direct an extra £1 billion towards pensioners since 1988 and, over the Government's lifetime, we have been able to orientate an extra £5 billion towards the disabled. We agree with the premises that my hon. Friend stated.

§ Mr. Raynsford
Does the Minister agree that the effect of the targeting that he has pursued has been to create extremely deep poverty traps for low-income households, particularly those in work, so that at present a low-income family getting help from family credit and housing benefit will lose 97p of every extra pound that it earns? When will the Government act to reverse those absurd poverty traps, which are an appalling disincentive for people in that position?

§ Mr. Burt
The particular statistic that the hon. Gentleman quotes applies to a tiny minority of people. The reform of the social security system in 1988, and subsequent changes to the tax and national insurance systems, have virtually eliminated the worst effects of the poverty trap. It is now virtually impossible to be worse off as a result of an increase in gross earnings. The hon. Gentleman knows that he refers to a tiny number of people.